Until recently, the switch from the traditional, transactional business model to the new economy of subscriptions has been reserved for software companies. The trend is now shifting wider with everything under the sun available on subscription. And the subscription companies seem to be winning…
Zuora, a leader in the subscriptions economy, has created a “Subscription Economy Index”. It found that revenue for subscription companies grew 9 times faster than that of the S&P 500. Subscription-based sales also grew 4 times quicker than U.S. retail sales and 5 times faster than the U.S. economy.
Not only are companies with subscription models growing faster, but many analysts believe they are worth a lot more than similar sized businesses on a traditional model.
In the subscription economy, customers are being serviced the way they want to. The Economist estimates that up to 80% of customers are demanding new consumption models. Subscription models aim to address this — they provide consistent customer engagement and build long-term relationships.
What does all this mean for veterinarians? What happens when corporate groups offer subscriptions to your customers? You are no longer losing out on a single transaction, you are losing your customer… for good! On the other hand, when independent veterinarians offer subscriptions to their customers, everyone in the value chain benefits including the animals which end up being looked after better.
Sources: The CFO Magazine, Zuoro.com.
Subscriptions in the veterinary industry (2mins)
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